China ready to also implement “parallel imports” in Tianjin image

According to Chinese state media, the government continues to fight the high level of car prices in the country by allowing a trial program designed to protect unauthorized dealers selling imported cars to be expanded to northern city of Tianjin.

Automakers fighting for a top position in the world’s largest auto market have more worries today than ever – the economy is creeping to its slowest pace since the 1990s, the auto sales have started to slowdown during the first four months of the year, while incentives and subsidies are higher than ever, eroding profit margins. And they also face the threat of the “parallel import” scheme, which was first established in Shanghai’s free trade zone in February. The system protects and allows unauthorized dealers to deliver cars that are almost always cheaper then the ones sold through official channels, with the blessing of the car producers. They are priced way better than their official counterparts, but the customers do lose the after-sales service or quality guarantee.

Now, according to the ruling Communist Party’s official newspaper, the program will extend its presence to Tianjin since June – actually giving the official nod on the already flourishing market centered around imported cars available in the city. The official take is that the pilot program would promote fair competition and allow customers a wider choosing base – though sources point out it’s one measure intended to help lower official car prices, which are usually higher than elsewhere in China, the world’s largest single auto market.

Via Reuters